1 March 2018 – Expansión
In 2017, Mapfre focused the management of its properties on the sale of non-strategic assets for a total of €130 million, of which €124.5 million corresponded to assets located mainly in Spain. That activity generated a profit of €65 million for the insurance company.
The entity sold the building it had occupied on the Madrilenian street Calle Luchana (pictured above) for €72 million, plus two plots of land in Palma de Mallorca for €22.5 million and other smaller assets for €30 million in total.
At the end of 2017, the market value of Mapfre’s real estate investments amounted to €2.9 billion, with latent gains of €750 million. That figure would offset a decrease in the price of its properties amounting to approximately 26.28% of the market value of the portfolio.
Of that total, €1.0 billion relates to properties that the insurance company uses in its normal activity, whilst the remainder, €1.3 billion comprise group investments.
Mapfre’s real estate portfolio accounts for 4.4% of the insurance company’s total investments, which amount to €49.6 billion.
Its government-backed fixed-income securities account for most of its portfolio (55%) at €27.4 billion, although they have reduced their weighting by 2.3 percentage points, given that previously they accounted for 57.3%. Corporate fixed-income securities accounted for 19% of the total, at €9.6 billion, compared to 20.2% a year earlier.
Insurance companies are natural investors in these types of assets, but in light of the decrease in interest rates, most entities are reducing the weight of their investments in those portfolios and increasing their presence in others that may offer higher returns, although also higher risk.
Equities are the caption that is growing the most within Mapfre’s portfolio, up by 44.2% in one year to reach €2.4 billion. Their weight amounted to 4.8% at the end of 2017, compared with 3.4% a year earlier.
Spanish fixed-income assets, both public and corporate, amounted to €18.2 billion at the end of last year, almost half the total amount, which reached €37.0 billion. The United States of America, with €3.7 billion and Brazil, with €3.4 billion, were placed in second and third position in that ranking.
Original story: Expansión (by E. del Pozo)
Translation: Carmel Drake